Bank of England announces major policy reforms

The UK central bank has announced a series of changes to enhance transparency, accountability and governance.

The Bank of England has decided to alter its 2016 meeting schedule to provide scope to move to eight policy meetings a year, rather than 12 a year as per the current schedule.

It will also hold four joint meetings of the monetary and financial policy committees in 2016.

Starting in August 2015, the bank will publish both the minutes of its policy meetings and, in the relevant months the inflation report, at the same time as its policy decisions.

As of the March 2015 policy meeting, the central bank will publish written transcripts of the meetings at which monetary policy is decided, as well as related staff policy briefing material, with an eight-year lag.

Governor Mark Carney said the bank now has “immense responsibilities” for monetary stability, financial stability and for microprudential regulation and with these responsibilities comes the need for effective transparency, genuine accountability and robust governance.

“Today I am pleased to announce the most significant set of changes to how we present and explain our interest rate decisions since the Monetary Policy Committee was formed in 1997,” Mr Carney said in the 11 December statement.

“Alongside those measures, we have also proposed a number of additional changes that will mark a step change in the governance of this institution,” he said.

“These changes will enhance our transparency and make us more accountable to the British people.”

On Thursday, the bank published an independent report by former US Federal Reserve board governor Kevin Warsh following his review of the monetary policy committee’s transparency practices and procedures.

Governor Warsh recommended that the Bank of England adopt reforms in service to what he called the “Big 4” objectives: making sound policy decisions; communicating judgments effectively; ensuring accountability for its actions; and creating a fair and accurate historical record.

The committee welcomed Governor Warsh’s report and accepted his recommendations.